United Oil offloads Italian operations

United Oil & Gas announced on Tuesday that, as part of the ongoing optimisation of its portfolio and capital allocation strategy, it has signed a conditional sale and purchase agreement with PXOG Marshall for the sale of all of the share capital of UOG Italia for €2.165m in cash.

The AIM-traded firm said the effective date of the sale to PXOG, a subsidiary of its partner on the licence Prospex Energy, was 1 January 2021.

Under the terms of the deal, United said it would receive an immediate deposit payment of €0.11m, with the rest of the consideration payable on completion

The sale consideration was at a “modest premium” to the total assets held by UOG Italia as at 31 December, and removed any further development expenditure associated with the Selva development.

For the year ended 31 December, UOG Italia reported a pre-tax loss of €36,934 and had total assets of €2.06m.

“We are pleased to sign this sale and purchase agreement with our joint venture partner on the licence, Prospex Energy,” said chief executive officer Brian Larkin.

“We wish them, and all stakeholders of the Selva project, well during its development.”

Larkin said the company believed that it was now the “optimal time” to focus its portfolio on its low-cost production business in Egypt, and high-impact exploration opportunities in the Caribbean and Latin America.

“The proceeds of this transaction and those of the previously announced North Sea asset divestments will further strengthen our balance sheet to support this growth strategy.”

At 1528 BST, shares in United Oil & Gas were down 1.43% at 3.45p.